GAC Group explains the logistics behind Oman’s container terminals and how a massive diversification project and new investment will benefit trade flow
Amid all the changes in the Middle East, one country along the Gulf coast is making an impact.
On the southeastern coast of the Arabian Peninsula,the Sultanate of Oman maintains a tight grasp around international trade flows and is undergoing a massive diversification project with a global impact.
Oman’s coast is a nucleus for the global trade routes connecting Europe and Asia. Its proximity to the Strait of Hormuz and international shipping lanes, along with four land borders with upper Gulf states, has led to its ports averaging 5,400-6,200 vessel calls annually.
Arabian dominance in container port effectiveness is now a measurable reality. According to a report by the World Bank and S&P Global Market Intelligence, four of the top five performing ports are in the Middle East, with Saudi Arabia’s King Abdullah Port in the top spot and Gulf competitors Port Salalah in Oman, Hamad Port in Qatar and Khalifa Port in Abu Dhabi making the top five.
Supporting a long-term vision
As part of Oman Vision 2040, massive investment has been ploughed into seaport infrastructure to shift the country’s economic reliance away from hydrocarbons and revamp its sea trade.
The Port of Salalah, which meets the north of the Indian Ocean, serves as a hub for the distribution and transport of containers in the transit area between East and West. The 45-km² port has 21 berths and specialises in general cargo, containers, liquid and bulk cargo activities.
Beyond Salalah, the other Omani port fully equipped to handle container vessels effectively and efficiently is Sohar. Another investment priority, the port can accommodate 3,000 vessel calls with a gross registered tonnage of around 85M every year.
Accessible to all major global ports within two weeks by sea, Sohar gives easy access to the developing markets in the Gulf, India and East Africa. It is one of the fastest-growing port operations worldwide, offering various value-added services and hosting Oman’s first terminal dedicated entirely to agricultural bulk cargo.
In the southeast and near to the Sultanate’s major oil and gas and mining projects, the Port of Duqm is being prepared to support the national economic diversification strategy due to its proximity to international shipping lines.
This process took a significant step forward in August this year, when the port signed an agreement with Al Maha Petroleum Marketing Co to provide bunkering services for marine vessels–part of a long-term vision for it to be a refuelling service provider to all industries in the Sultanate.
The ultimate goal for these ports is to provide shippers with a competitive edge in the world’s commercial arteries, serving the markets of Asia, the Indian subcontinent, the Middle East, Africa and Europe.
Considering Oman’s advantageous geographical position, it would be surprising if its ports didn’t feature among the world’s most efficient. But maintaining that edge is another thing entirely.
Easing port operations
Cargoes passing through Oman’s ports are as varied as the economic opportunities they present. As a major energy producer, oil and gas are among the top commodities, but engineering materials, automotive parts, electronics, industrial equipment and building materials are just as prolific in its trade routes.
“We don’t just see raw materials running through the ports here. As a major transhipment hub, the commodities entering through the various sea, air and land borders range from refrigerators to turbines,” says GAC Oman director, logistics Sameeh Abdullatif.
The GAC Group is a leading global provider of integrated shipping, logistics and marine services. It supports container port operations in the Gulf where it has offices in Bahrain, Jordan, Kuwait, Oman, Qatar, Saudi Arabia, the United Arab Emirates and Yemen.
GAC Oman business manager at Sohar, Ashan Silva says, “GAC has handled a significant volume of imports and exports through Oman and the wider Gulf area by sea, land and air. Our logistics support ranges from terminal operations, such as transhipment, storage and tracking, to shipping, land transport and customs clearance.”
“To facilitate the movement of containerised cargo, we engage container freight station operators to rework less-than-container-load cargo and support loading and offloading containers at terminals or GAC facilities,” adds Mr Sameeh.
These services facilitate the movement of containers throughout Oman’s major ports and continue contributing to their success. In 2021, Omani ports handled around 5.2M TEU of containers. Mr Silva is optimistic the volume will be similar this year.
Overcoming challenges
The fact that shipping in the Middle East has been susceptible to disruption cannot and should not be ignored. The ongoing global pandemic, environmental catastrophes, political instabilities, economic downturns and trade wars mean container transport in the Gulf has experienced unavailability of equipment and slots, high sea freight rates, blank sailings and additional surcharges from main lines in security and fuel.
Transparency and communication have become essential to mitigating such issues, which are now a constituent factor of supply chains, even in the most efficient ports.
The ability of staff to continually meet customer requirements enables ports to maintain a healthy relationship with and support the needs of terminal authorities and customers.
Mr Silvarecalls a recent example of how these capabilities kept port activity in motion. A container vessel arrived with only international maritime dangerous goods cargo, resulting in government consignment of the freight. Close communication with government officials meant an early acquisition of approvals and arranging direct delivery without any delays. Likewise, transparency with the Oman International Container Terminal in Sohar saw all the necessary arrangements established in advance. As a result, GAC secured on-arrival berthing and completed discharging for the vessel well in advance of the initial estimates.
For GAC, knowing how the business operates is one thing, but understanding the culture, the trade history and current events in the region is just as important.
“The benefits of having offices in the area are invaluable. That is why GAC Oman invests in offices in all airport and seaport terminals: to ensure our customers are served by an experienced team with local knowledge and expertise alongside fully equipped facilities,” shares Mr Sameeh.
Omani ports are already vibrant with trade activity, capable of supporting the world’s largest ships and characterised by features typically seen only in international trading centres. The new investment plans, in conjunction with effective service operations, are quickly forging confidence in the Sultanate’s global prospects.
